Langton Capital – 2016-06-07 – Vianet, Coca Cola HBC, Brexit, US interest rates & other:
A Day in the Life:So the dog at least is pleased to see us. He must have thought that his family had diminished materially in size but now, replete with the knowledge that it has not, he’s adopted the stupid-puppy-eyes and turbo-grovelling approach towards ingratiating himself back into the fold. And it works, of course. Because, whilst it may be genetically programmed and no closer to love than is his inclination to lick parts of his body best left un-licked, when he does the ‘you’re so wonderful’ thing that dogs do, it’s hard not to shovel towards him those leftover Rice Krispies, cold bacon fat and stale bread that he so craves. It’s part of a balanced diet mind, no need to ring the RSPCA or any of that nonsense. Added to which his chasing of any stray pigeons, the local rabbit population and his own tail keeps him in reasonable shape and, as he smells less atrocious than he does when something has died that he can roll in, his stock is trading at a relative high. On to the news: The News:PUB, RESTAURANT & DRINKS PRODUCER NEWS: • Vianet reports FY numbers to end-March. Revenues +3.8% to £19.24m, continuing revenues £14.3m (2015: £14.4m). • Vianet reports FY recurring revenues ‘strong’ at 69% of total (vs 71% last year). PBT +14.2% to £1.95m. Reported PBT after loss on disposal £2.57m vs £1.71m last year. • Vianet says has cash of £2m. Reports basic EPS of 5.8p (2015: 6.3p) and pays a full year dividend unchanged at 5.7p. • Vianet says leisure business was ‘resilient’ with profits virtually unchanged at £4.12m (2015: £4.14m). Nonetheless, it has seen a ‘further fall in the number of installations and Statutory Code uncertainties.’ It has signed 5yr extension deals with Star Pubs, Trust Inns, Punch Taverns and Admiral Taverns. Chairman James Dickson reports ‘I am pleased with our performance across the entire business in the period under review. ‘ He says ‘we saw good progress in each of the three divisions and we are continuing to pursue growth opportunities in our Vending and Leisure divisions.’ • Vianet says ‘we have continued to experience adverse pressures in our beer flow monitoring operations, but with a noticeable slowing in the rate of UK pub closures combined with strong recurring revenues and further iDraught sales, the Leisure division’s income has been stable within the period.’ Mr Dickson concludes ‘the Board of Vianet looks forward confidently to a positive outcome from the current financial year.’ He says ‘the Group believes that strategic insight and actionable data will be the fundamental value driver in years to come, and so continues to develop its Internet of Things capability to provide ever greater value to its customers.’ • JD Wetherspoon yesterday bought back 37,500 shares for cancellation at 724p. Enterprise Inns bought back 98,500 at c96p • Coca Cola HBC yesterday hosted an investor event in London. It said ‘looking ahead, we expect an improving external environment to support growth in our markets over the period to 2020, including average annual non-alcoholic ready-to-drink industry volume growth of approximately 1.5% across our territory.’ The group continued ‘this stronger backdrop, combined with the inherent growth opportunities in our portfolio, underpins our aspirations for an acceleration of performance going forward.’ • Coca Cola HBC announces growth targets. Aims for average annual revenue growth of 5% to 6%. • Coca Cola HBC to target further cost savings with EBIT margins of 11%. Aims for capex of 5.5% to 6.5% of sales. CEO Dimitris Lois reports ‘over five years and in a difficult external environment, we have created a more efficient and stronger business that is now primed for growth in improving market conditions. We have a balanced spread of territories with structurally attractive characteristics and specific plans for growth.’ Mr Lois concludes ‘we have reflected these factors in our new targets, announced today, which illustrate our confidence in the medium-term potential of the business.’ • Ruby Tuesday announces appointment of Sue Briley as Interim CFO. • The Bank of England has provided training materials identifying security features of the new £5 polymer note, which will enter circulation on 13 September. The new note is printed on flexible plastic and will be more durable and harder to counterfeit than the current £5 note. • A new YouGov survey of 1,648 adults for the Times has found that 31% of middle-class, ABC1 workers would need to borrow to pay an unexpected bill of £500. This figure rises to 46% for manual workers and the unemployed, and chimes with similar work carried out in the US by the Federal Reserve, which recently examined how US consumers would respond to a $400 (£276) emergency. • Recent warm weather caused a bout of online shopping for paddling pools, outdoor toys, and new clothes in May, according to the BRC-KPMG Online Retail Sales Monitor. Online sales grew 13.7% in the month, marking a ‘stark acceleration’ on the 6.6% recorded in April, and meaning that online sales made up 21.2% of all non-food sales in May – the third highest level recorded. LEISURE TRAVEL: • Parkdean Resorts, owner & manager of 72 UK holiday parks reports FY 2015 numbers. Pro-forma revenues £400.7m • Parkdean FY numbers. EBITDA +15.7% at £106.6m with synergy benefits expected to add to that number. • Parkdean ‘is a business of scale and nationwide spread.’ Says has seen ‘organic growth in the existing estate with only one acquisition, Summerfields near Great Yarmouth, in April 2015.’ • Parkdean says it ‘benefitted from growth across a number of diversified but complementary income streams: Owner income, holiday sales, caravan and lodge sales and on-park spend. All income areas showed growth in 2015.’ • Parkdean says ‘in the current year, we will continue to invest in a pipeline of revenue enhancing development and expansionary opportunities across the estate, investing c. £40m.’ it adds ‘we have experienced a strong start to 2016 with holiday bookings significantly sold and showing 11% growth over 2016, 96% of our annual pitch licence fees attained and a particularly strong performance from our retail operations, continuing the double digit growth seen in 2015 and clearly demonstrating the benefits of the investment strategy. Holiday home sales have also continued to perform well in the first five months of 2016.’ • Parkdean CEO John Waterworth reports the group ‘enjoyed another strong year across the portfolio and the newly combined Group delivered £106m of EBITDA last year, growth of 16% over the prior year.’ He says ‘the scale of the merger [with Park Resorts] has brought national sales capability for the first time and merger synergies will flow through in the current year and beyond.’ The group has declined to comment on suggestions that the company, which is backed by Electra Private Equity and Alchemy Partners, may be preparing to appoint advisers to look at strategic options. No imminent decisions are expected. • STR and Tourism Economics’ latest forecasts suggest that supply growth in the US hotel industry will match demand growth in 2017, while occupancy growth will be flat. Rate rises are expected to drive revenue per available room growth of 4.4% in 2016 and 3.8% the year after despite the narrowing gap between supply and demand. • Around two thirds (67%) of parents would take their children out of school to go on holiday during term-time, according to a poll by travel insurer Holidaysafe.co.uk. • Shots were fired at a bus full of Czech tourists in southeast France on Saturday night, leaving six people injured. It is believed that a hunting rifle was used in the attack, which took place halfway between Lyon and Marseille. • Air France pilots will strike from next Saturday (11 June) over pay and working conditions, one day into the month-long Euro 2016 football competition. Strikes have been held across France in recent weeks as workers protest about the government’s plan to change labour laws. • Research by comparison site comparethemarket.com shows that many travel insurance policies fail to protect families against common occurrences. An analysis of hundreds of single-trip policies concluded that around 14% failed to reimburse for missed flights, while many others fail to cover lost bags and medical bills. OTHER LEISURE: • Chinese retail giant, Suning Commerce Group, will pay €280m (£220m) as part of a deal to own a near-70% controlling stake in Serie A football club Inter Milan. The group will pay a total of €750m (£590m), providing Inter with a steady stream of capital investment, while ex-owner Erick Thohir remains president with a reduced stake of 31%. • An American consortium led by Jason Levien and Steve Kaplan are has completed the takeover of Swansea City football club, after its £100m deal was approved. The group, which has experience of running US sports teams, must pass the League’s test for prospective owners to make it official. • Three groups are reportedly vying for ownership of newly-promoted Hull City, which has been up for sale since 2014. The interested parties are thought to consist of two US-based consortia and one UK and European group that recently missed out on becoming owners of Aston Villa. FINANCE & MARKETS: • Yellen speech taken as dovish but little detail. Fed chair Janet Yellen yesterday struck an optimistic tone on the outlook in the US. She said interest rate rises are coming but gave little detail as to when. Ms Yellen said ‘I see good reasons to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones.’ She said that Friday’s jobs data was ‘disappointing’ but said that ‘further gradual increases in the federal funds rate are likely to be appropriate.’ A rise is thought possible, perhaps likely, in July. • New car registrations in the UK rose by 2.5% in May vs last year. • The investor confidence index rose to 9.90 in the Eurozone in early June, surpassing expectations of 7.00 and handily beating the 6.20 recorded in the previous month. • Eurozone investor confidence rose in June to 9.9 vs 6.2 in Masy. • World markets: UK up yesterday on mining bounce. Europe & US also up and Asian markets up in Tues trade • Oil price holding above $50. Brent crude currently trading at around $50.40 per barrel • The Scottish economy is decelerating faster than anticipated, according to the EY Scottish Item Club, which now forecasts growth of only 1.2% for 2016. This is just over half the forecast growth rate for the rest of the UK, of 2.3%, and down from the Club’s December estimate of 1.9%. • Sterling down yesterday on tighter polls re Brexit. Retail Roundup from Nick Bubb:
BRC-KPMG Retail Sales for May (4 weeks to May 28th): SMMT New Car Sales Watch: Yesterday’s figures from the SMMT for new car sales for May looked OK at first sight, with growth of 2.5% and c204,000 vehicles registered. But, following the trend set in the previous two months, it was fleet registrations that drove the growth, with an 8.8% rise counterbalancing a 3.0% fall in registrations to private customers. Mike Hawes, SMMT CEO, said, “The new car market in May remained high with compelling offers available on the latest vehicles, but the low growth is further evidence of the market cooling in the face of concerns around economic and political stability. Whether this is the result of some buyers holding off until the current uncertainty is resolved or a sign of a more stable market for new cars remains to be seen”.
Today’s Press and News: News Flow This Week: The continuing Parliamentary inquiry into BHS will get plenty of attention tomorrow, when the infamous Dominic Chappell appears before MP’s, but there is plenty of other stuff going on tomorrow, with the Shoe Zone interims, the AO World finals and the Sainsbury Q1. The Home Retail (Argos) Q1 then follows on Thursday and on Friday we get the Bonmarche finals and…the start of Euro 2016 in France. Nick Bubb – nicholas_bubb@hotmail.com Yester-tweet – Yesterday in a Nutshell: Live Tweets on Website:Some of the early Tweets: • Crystal Amber reported to have taken 1% stake in Restaurant Group. Investor last seen in Thornton. Hardly a surprise. • Uber reported ready to expand its food delivery business in the UK, take on Deliveroo • Sunday Times reports Asahi is considering a £5bn approach for a number of SABMiller’s eastern Europe brands • Diageo is reported to be exploring options for its Scottish businesses should the region wish to exit the UK post any Brexit vote • Activity in the UK’s service sector picked up last month to 53.5 from 52.3 on the Purchasing Managers’ Index • Fosun is ‘in advanced talks’ to acquire 10-15% stake in Compagnie des Alpes, which specialises in ski resorts and family parks per Le Monde • The ocean cruise industry is expected to handle more than 24 million passengers this year, according to Clia figures • The Telegraph reports ‘Goals Soccer Centre will kick off a £7.9m branding overhaul later this year’. • 40yr mortgages now on offer. Then surely heighten the risk of sucking in unprepared first time buyers and increasing costs overall Later Tweets: • Gold oil ratio: Oil convincingly >$50 but gold/oil ratio (no. of barrels per ounce) little changed at 24.6 over 2wks as gold also higher • If gold is a risk-off investment & oil is risk on, then what does it mean when both prices are rising? Surely it doesn’t indicate inflation? • UberEats challenges Deliveroo (&Just Eat). A case of the disrupter being disrupted? Does it mean some Unicorn valuations are fleeting? • Fosun getting stuck into Co. des Alpes. Any link up in there for Thomas Cook? Latter’s price battered but still looks like a growth industry |
|